§ 88.435 — Liability of person erroneously believing self to be limited partner

1. Except as provided in subsection 2, a person who makes a contribution to a business enterprise and erroneously but in good faith believes that the person has become a limited partner in the enterprise is not a general partner in the enterprise and is not bound by its obligations by reason of making the contribution, receiving distributions from the enterprise, or exercising any rights of a limited partner, if, on ascertaining the mistake, the person:
(a) Causes an appropriate certificate of limited partnership or a certificate of amendment to be signed and filed; or
(b) Withdraws from future equity participation in the enterprise by signing and filing in the Office of the Secretary of State a certificate declaring withdrawal under this section.
2. A person who makes a contribution of the kind described in subsection 1 is liable as a general partner to any third party who transacts business with the enterprise:
(a) Before the person withdraws and an appropriate certificate is filed to show withdrawal; or
(b) Before an appropriate certificate is filed to show that the person is not a general partner,
Ê but in either case only if the third party actually believed in good faith that the person was a general partner at the time of the transaction.

Legislative History

(Added to NRS by 1985, 1285 ; A 1987, 72 ; 2003, 3154 )